You're making the exact same argument I'm trying to show really doesn't hold up. First of all, NASA is not responsible for the LCD display I'm reading this on. It would have happened eventually. NASA sped it up to be sure, but with a very hidden opportunity cost: the best venues for R&D that didn't get pursued because of the diversion of resources to NASA.
Remember, if people at NASA thought of the possibility of LCD's someone else probably did, but didn't bother pursuing it because of cost considerations. Those costs are not trivial concerns; they were indicators that at the time there were better uses of scarce resources. NASA didn't change the fact that there were better uses of scarce resources; they just ensured that this particular use of scarce resources actually happened, despite the fact that there were better uses. We'll never know what would have happened instead, but it would have gone to more pressing needs at the time, ensuring better resource availability now.
Long story short, if you want better computers, research better computers. If you want better materials, research better materials. You shouldn't say "Invest in ways to get into space so we can make better materials". And you shouldn't say "Space research is good because it gets us better computers." It was the computer research that produced the benefit, irrespective of whether that research is "for space" or not. Don't use peripheral gains to justify a different goal. Just say what you mean.
Profits are bad because people elect politicians who endorse the "state-protected monopolies are good" belief? People can get so schizo on this issue. I tell them about the benefits of competition, and they naysay me with "No, it's more efficient if we just have one business doing everything, we can't allow cutthroat competition, there's no need for a second company anyway"... and then they gripe when the state-protected monopolies suck. There's an easy place to look for the source of this problem: it's called a mirror.
Okay. Step back a second. At the point where you entered the thread, I wasn't denying the existence of applications. I was claiming that the article, which I "didn't read", does not provide enough information to know that the research is cost-justified. This is because there are a number of considerations in determining whether the research was a good use of scarce resources. The article did not answer any of those questions. To determine that the research was cost justified, you have to check off a number of things:
-Are users willing to pay the amortized cost of the research in its applications? Crude example: if the research has an amortized cost of $10 on each unit, but users are willing to pay only $1 for the feature, the research already didn't pay for itself. This may sound obvious, but keep in mind, inventions can do many "cool" things and still fail this test! Similar example: let's say (for simplicity) that the invention can just be used by the Air Force. Let's say that currently, the Air Force can double its combat effectiveness with $1e9. Then say the invention allows the Air Force to double its combat effectiveness for $2e9. In that case, the research was a waste. If instead, the research can double the combat effectiveness for $5e8, that is a gain of $5e8, which can then apply against the cost of the research to see if it paid for itself.
-Summing up all those cost savings must then be greater than the research costs, discounting for forgone opportunities, aka interest. If the research cost $1e9 and saves $1e9 20 years later, that's a loss, because you could have just put the $1e9 in a bank and let the interest accrue.
-That's not all. You have to then divide by the success rate of the research. The research gains must pay for all research costs; you can't just just count the winners and ignore the losers. The winners must also recoup the cost of the losers.
If it meets all those tests, then the research was justified. AGAIN, I don't deny that there are many uses of the research, but the article I "didn't read" gives no information about whether it met any part of the above. Contrary to what you claim, it would help if there were more people like me giving reality checks: "Can't we use a memory thermometer for the same purpose?" (referring to the memory metal discussed in an earlier article) Too often people count the benefits and ignore the costs. Even if the benefits do ultimately outweight the costs, you should still consider them. Getting it right through luck is a bad policy.
So, just to clarify, when you count ALL benefits, the research could be justified; the article just doesn't show that, and people rarely make this calculation.
Sure, those are all important things to consider, and things the Air Force should consider: does the technology actually save us money. If we had spent the research on beefing up existing methods (i.e., buying more F-whatevers, buying more pilot training), would we be more effective in battle? , etc.
But the point of the GP you responded to was that the article does not give such an analysis. That post was in response to someone claiming my questions were answered by the article "if I bothered to read it". I did bother to read it. And it simply doesn't give enough info to say if the research was worthwhile. That was all I was trying to say in the post.
Remember, it's not enough to say "technology X can do Y"; you must show it was preferable to the other uses of the resources used in developing and building it. A diamond-bladed lawnmower could be cost justified at some point for some use; I just use that as an example that's currently not, yet deceptively does "cool" things.
O RLY? The article explained the dollar value of each of these benefits relative to existing technology? And the present value of all of these benefits? And the cost of the research? And the cost of all research? (All necessary to justify the research, as explained in my post.)
In fact, the article listed none of these, providing no cost-effectiveness justifcation whatsoever. You need to understand that it's not enough simply to say "Invention X does cool thing Y"... you have to know what you're missing by getting it. A diamond-bladed lawnmower could do new things, like cut grass with a much slower depreciation rate. That doesn't mean making one isn't a waste of time.
No argument here. But doesn't this seem like an area where someone needed to cut some really tough grass, and then realized that only a diamond-bladed lawnmower would do the trick? Here comes the $1b prototype, and next year the cost is down to $100 because someone responded to the demand for a cost-effective solution and came up with cheap diamonds.
Right, my explanation accounted for this. You can't just say "oh, we had a one-time cost of $1e9 and now are costs are $1e4 less on each application, so it's 100% certain it wasn't a waste of time." You have to amortize the research costs (spread it over all the uses, discounting for time value). So, for example, if you were only going to use the diamondbladed lawnmower five times, it didn't make up its cost. Or if it saved $1e9, but that came all at once, 20 years later, it was a waste of time because $1e9 20 years from now is less than $1e9 right now, through the miracles of interest.
But that's not all: you have to divide the research cost by the success rate. Sure, the research on this innovation was $1e9, but your research program in aggregate may be $1e10. If this was the only success, your success rate is 10%, so you could only justify the research if it saved $1e9/10% = $1e10. (I know, you could avoid the math and just say "you have to look at the whole research program's cost", but using the success-rate method lets you analyze each innovation in isolation.)
And I know, the research may not "just save money" but "also save lives". But you can include those benefits as part of the cost saving, so the cost-effectiveness calculation covers everything.
(Small digression: "What? Human life has a finite value? You *#*$*)(!" Well, in a sense, yes. If you have a statistical certainty of saving a life through $800,000, you know that you wasted money if your technology saved a life at a cost of $1e6.)
you say "ignoring futures markets and speculation, the fundamental methods by which resource fluctuations and overuse are stamped out." is a socialist act.
Yes, ignoring those mechanisms is something only the ignorant and the socialist do - and I'm erring in their favor.
(which, by the way, puts you in no position to criticise grammar)
Nope, the grammar's fine.
Enron did exactly this. So now, either Enron is (was) socialist, or you are wrong.
No, Enron did not ignore futures markets and specualtion; they actively dabbled in them.
Remember kid, it's ignoring these markets that is socialist, not the markets themselves that are socialist.
A transparent ceramic that's lighter and stronger than glass and the various plastics now used, and you think it doesn't have a practical application?
Of course it does. But that's not enough. A diamond-bladed lawnmower has practical application. It has to be more cost effective than current alternatives, even amortizing the research costs divided by success rate. Can you justify this development that way? Sure, I supposed, but has any Slashdotter even tried?
Using energy resources is bad, but high prices, which discourage people from unnecessarily using energy resources, are also bad......yeah, one day I'll understand, just not today.
It's gotten to the point where on the front page yesterday, it mentioned dildos and pegging. Now, obviously they should include that topic, but do you really have to greet the wide variety of people with that, on the very front page? Why not make g**tse a featured pic? To eliminate it would be culturally POV.
Plus, every article reeks with socialist bias and the editors take every chance to slip in socialist terminology like "reserve army of the unemployed" or "proletariat" or "wage slavery" like they're neutral terms. (Yes, I correct that were I find it.) And then they have the new "energy development" Wikipedia project, that promotes socialist misinformation by ignoring futures markets and speculation, the fundamental methods by which resource fluctuations and overuse are stamped out. You were aware that your donation to Wikipedia was used to promote socialist misinformation, right?
Seriously, it's funny to watch all these people try to find a practical application for this invention that cannot already be done better and cheaper with pre-existing technology, in order to justify the research expense (probably paid by you and me out of our wages). And that's before you even divide the research cost by the success rate!
I didn't say it was a fundamental theorem; math doesn't talk about taxes. It does, however, have a lot to say about which functions have maxima, and the tax revenue/tax rate curve is one of them (positive on [0,100], zero at 0 and 100, no vertical asymptotes). Don't try to bluff your way out of this. I said the function was positive. You took that to mean strictly increasing (positive slope). You were wrong. Sorry, no two ways about it. If you stick your neck out that far on a mistake that big, I'd really hate to know what your "research" looks like, unless that's "research" for a good employer at the day labor site.
I agreed from the outset, and in the post you didn't read before firing off your mouth, that there can be multiple Laffer points (though I deem it unlikely). Also (~8th time): I never claimed the Laffer curve guarantees that cutting taxes can increase revenues, just that it's a possibility. It is useful for policy making, because ~95% of politicians don't understand, or act as if they don't understand, its fundamental insight: taxes can kill the goose that lays golden eggs. Taxes can hurt the economy, even without benefiting the government. People won't admit this very plain insight because they don't like the implications: that the politicians they have been supporting have been hurting more than helping.
That's why they hem and haw about it, but when presented with its unassailable logic, they revert to "Well it's still a stupid curve... because we might not be past a Laffer point... uh, and the curve is wrong too." Well, sorry, it's not. And if people stopped claiming it's not, we could actually start finding out where we are.
Did you not understand the significance of what just happened? Sure, you have to have a working system to receive a patent... now. But, just as the patent office just eliminated the "technological arts" requirement, they could eliminate the "working system" requirement. That was my point.
Come on, they had to do this at some point. All intellectual works are basically discovery of some *previously existing* but useful aspect of reality. If you invent a new mousetrap, you're discovering the previously-existing aspect of reality that some organization of different materials is better at catching mice. If you write a book, you're discovering the previously-existing aspect of reality that people like a certain combination of words. Trying to classify one kind as "technological" and the other as not gets really tricky.
Next on the list: the patent office stops rejecting discoveries as being "too theoretical". Imagine working around those patents!
Really? You played the riddle? Oh? You mean you couldn't play the puzzle? Let's try not to be a Firefox apologist. Just because you can *get to* the site doesn't mean you get all its functionality. It specifically says to do the puzzle you need IE. Sorry, nice try though.
Careful with that argument. It seems to have as an implicit assumption that monarchs know what's best. Absolute monarchy - is that the kind of government you favour?
Check out Democracy: The God that Failed (Transaction, 2002) by Hans-Hermann Hoppe (on amazon and wikipedia), who argues that while democracy and monarchy are morally bankrupt forms of government, monarchy is clearly preferable for essentially the reasons I gave: the monarch owns the capital value of the country, while a democratic leader is just a caretaker and only owns temporary usage rights. A monarch will maximize capital value, which means taking into account long-term effects of his actions, while a democratic leader will maximize his current takings at the expense of the future - get while the gettin's good (think in terms of the Senator Bilkins Highway to Nowhere). This is not to say all monarchs are foresighted, and all presidents are short-sighted, just that the former's incentive structure encourages long-term thinking, while the latter's discourages it. Again, it's a ceteris paribus statement: the same person will be more reckless with a country if it does not cost him the capital value than if it does cost him the capital value.
Nor does it assume monarch's know what's best, merely that they have more incentive to search, and because there were more of them (over 1000 in the Holy Roman Empire) they have more data to go on. A monarch might have heard from 20 other princes that they raised taxes to 20% and saw a loss in revenue, whie 6 raised taxes to 20% and saw a gain. He could then adapt appropriately. Likewise, another could talk with other monarchs who made massive internal improvements and find out if that increased the number of people wanting to live there and thus the taxes they could get away with charging and then see if that offset the cost of making that improvement. Further, unlike the average voter, a monarch feels the full impact of his policies and doesn't face the "what does your vote matter?" problem, so he is more likely to research what actually works.
Again, these effects could all be minor relative to other effect, but they nowhere rely on monarchs as monarchs knowing what's best.
This should really say "...but make no mistake there is at least one Laffer point."
Hm...good point. To clarify that issue, my statement probably should have read:
"Again, you might not be past a Laffer point, but make no mistake there is a Laffer point."
Oops, it already did.
Note I referred to being past "a" Laffer point, not "the" Laffer point, so obviously I didn't assume there was only one.
You can't really assume it's a smooth function,
Not necessary. So there exist tax rates above which revenues jump up, or tax rates above which the revenues jump down. Doesn't change the fundamental insight.
let alone with a single point that is optimal.
Never said so or even hinted. See above.
Hell, you can't even assume the curve doesn't change over time.
Of course it will change over time; the theory never says otherwise, and neither did I. It's phrased under a ceteris paribus clause. The claim is that it's possible that at some specific point in time, with all its policies, if you just lower taxes, you will have higher revenues that if you had those policies but not altered clauses. The circumstances can of course change.
I had a conversation with Brian0918 on AIM this morning, in which he revealed he's really trolling when I pointed out to him there is no solution (see my other posts) on this topic. Here's a little tidbit: ". i usually just post the problem to get people into big disputes, which so far has worked 2 out of 2 times". If you want the full conversation, email me at sbartaNOSPAM_at_MAPSONgmail.com.
Sure it is. Monarchs tried to maximize revenues. If building a new bridge meant he could get more in taxes, accounting for the interest rate, he would do it. If some monarchs systematically guessed wrong on the utility of bridges, the ones that didn't would beat them out (war, immigration). The evidence I gave is actually more conclusive: that monarchs did not systematically engage in social spending and internal improvements probably means they don't increase tax revenues, which mean they probably don't increase the health of the economy, else they would lead to more tax revenues.
Slashdot Mirror
You're making the exact same argument I'm trying to show really doesn't hold up. First of all, NASA is not responsible for the LCD display I'm reading this on. It would have happened eventually. NASA sped it up to be sure, but with a very hidden opportunity cost: the best venues for R&D that didn't get pursued because of the diversion of resources to NASA.
Remember, if people at NASA thought of the possibility of LCD's someone else probably did, but didn't bother pursuing it because of cost considerations. Those costs are not trivial concerns; they were indicators that at the time there were better uses of scarce resources. NASA didn't change the fact that there were better uses of scarce resources; they just ensured that this particular use of scarce resources actually happened, despite the fact that there were better uses. We'll never know what would have happened instead, but it would have gone to more pressing needs at the time, ensuring better resource availability now.
If you've seen my posts on this issue before, you probably know how I hate these justifications for space research See:
7 33897
8 20378
7 47052
http://slashdot.org/comments.pl?sid=164516&cid=13
http://slashdot.org/comments.pl?sid=165623&cid=13
http://slashdot.org/comments.pl?sid=164705&cid=13
Long story short, if you want better computers, research better computers. If you want better materials, research better materials. You shouldn't say "Invest in ways to get into space so we can make better materials". And you shouldn't say "Space research is good because it gets us better computers." It was the computer research that produced the benefit, irrespective of whether that research is "for space" or not. Don't use peripheral gains to justify a different goal. Just say what you mean.
Profits are bad because people elect politicians who endorse the "state-protected monopolies are good" belief? People can get so schizo on this issue. I tell them about the benefits of competition, and they naysay me with "No, it's more efficient if we just have one business doing everything, we can't allow cutthroat competition, there's no need for a second company anyway" ... and then they gripe when the state-protected monopolies suck. There's an easy place to look for the source of this problem: it's called a mirror.
Okay. Step back a second. At the point where you entered the thread, I wasn't denying the existence of applications. I was claiming that the article, which I "didn't read", does not provide enough information to know that the research is cost-justified. This is because there are a number of considerations in determining whether the research was a good use of scarce resources. The article did not answer any of those questions. To determine that the research was cost justified, you have to check off a number of things:
-Are users willing to pay the amortized cost of the research in its applications? Crude example: if the research has an amortized cost of $10 on each unit, but users are willing to pay only $1 for the feature, the research already didn't pay for itself. This may sound obvious, but keep in mind, inventions can do many "cool" things and still fail this test! Similar example: let's say (for simplicity) that the invention can just be used by the Air Force. Let's say that currently, the Air Force can double its combat effectiveness with $1e9. Then say the invention allows the Air Force to double its combat effectiveness for $2e9. In that case, the research was a waste. If instead, the research can double the combat effectiveness for $5e8, that is a gain of $5e8, which can then apply against the cost of the research to see if it paid for itself.
-Summing up all those cost savings must then be greater than the research costs, discounting for forgone opportunities, aka interest. If the research cost $1e9 and saves $1e9 20 years later, that's a loss, because you could have just put the $1e9 in a bank and let the interest accrue.
-That's not all. You have to then divide by the success rate of the research. The research gains must pay for all research costs; you can't just just count the winners and ignore the losers. The winners must also recoup the cost of the losers.
If it meets all those tests, then the research was justified. AGAIN, I don't deny that there are many uses of the research, but the article I "didn't read" gives no information about whether it met any part of the above. Contrary to what you claim, it would help if there were more people like me giving reality checks: "Can't we use a memory thermometer for the same purpose?" (referring to the memory metal discussed in an earlier article) Too often people count the benefits and ignore the costs. Even if the benefits do ultimately outweight the costs, you should still consider them. Getting it right through luck is a bad policy.
So, just to clarify, when you count ALL benefits, the research could be justified; the article just doesn't show that, and people rarely make this calculation.
Sure, those are all important things to consider, and things the Air Force should consider: does the technology actually save us money. If we had spent the research on beefing up existing methods (i.e., buying more F-whatevers, buying more pilot training), would we be more effective in battle? , etc.
But the point of the GP you responded to was that the article does not give such an analysis. That post was in response to someone claiming my questions were answered by the article "if I bothered to read it". I did bother to read it. And it simply doesn't give enough info to say if the research was worthwhile. That was all I was trying to say in the post.
Remember, it's not enough to say "technology X can do Y"; you must show it was preferable to the other uses of the resources used in developing and building it. A diamond-bladed lawnmower could be cost justified at some point for some use; I just use that as an example that's currently not, yet deceptively does "cool" things.
O RLY? The article explained the dollar value of each of these benefits relative to existing technology? And the present value of all of these benefits? And the cost of the research? And the cost of all research? (All necessary to justify the research, as explained in my post.)
... you have to know what you're missing by getting it. A diamond-bladed lawnmower could do new things, like cut grass with a much slower depreciation rate. That doesn't mean making one isn't a waste of time.
In fact, the article listed none of these, providing no cost-effectiveness justifcation whatsoever. You need to understand that it's not enough simply to say "Invention X does cool thing Y"
No argument here. But doesn't this seem like an area where someone needed to cut some really tough grass, and then realized that only a diamond-bladed lawnmower would do the trick? Here comes the $1b prototype, and next year the cost is down to $100 because someone responded to the demand for a cost-effective solution and came up with cheap diamonds.
Right, my explanation accounted for this. You can't just say "oh, we had a one-time cost of $1e9 and now are costs are $1e4 less on each application, so it's 100% certain it wasn't a waste of time." You have to amortize the research costs (spread it over all the uses, discounting for time value). So, for example, if you were only going to use the diamondbladed lawnmower five times, it didn't make up its cost. Or if it saved $1e9, but that came all at once, 20 years later, it was a waste of time because $1e9 20 years from now is less than $1e9 right now, through the miracles of interest.
But that's not all: you have to divide the research cost by the success rate. Sure, the research on this innovation was $1e9, but your research program in aggregate may be $1e10. If this was the only success, your success rate is 10%, so you could only justify the research if it saved $1e9/10% = $1e10. (I know, you could avoid the math and just say "you have to look at the whole research program's cost", but using the success-rate method lets you analyze each innovation in isolation.)
And I know, the research may not "just save money" but "also save lives". But you can include those benefits as part of the cost saving, so the cost-effectiveness calculation covers everything.
(Small digression: "What? Human life has a finite value? You *#*$*)(!" Well, in a sense, yes. If you have a statistical certainty of saving a life through $800,000, you know that you wasted money if your technology saved a life at a cost of $1e6.)
you say "ignoring futures markets and speculation, the fundamental methods by which resource fluctuations and overuse are stamped out." is a socialist act.
Yes, ignoring those mechanisms is something only the ignorant and the socialist do - and I'm erring in their favor.
(which, by the way, puts you in no position to criticise grammar)
Nope, the grammar's fine.
Enron did exactly this. So now, either Enron is (was) socialist, or you are wrong.
No, Enron did not ignore futures markets and specualtion; they actively dabbled in them.
Remember kid, it's ignoring these markets that is socialist, not the markets themselves that are socialist.
He didn't point out any hypocrisy. And what is a "socialist" company? And high energy prices are good, because they teach us not to consume, right?
Hey, if you know the point he was trying to make, I'd really like to hear. You should be able to express it using complete sentences. Ready, set, go.
A transparent ceramic that's lighter and stronger than glass and the various plastics now used, and you think it doesn't have a practical application?
Of course it does. But that's not enough. A diamond-bladed lawnmower has practical application. It has to be more cost effective than current alternatives, even amortizing the research costs divided by success rate. Can you justify this development that way? Sure, I supposed, but has any Slashdotter even tried?
Using energy resources is bad, but high prices, which discourage people from unnecessarily using energy resources, are also bad... ...yeah, one day I'll understand, just not today.
It's gotten to the point where on the front page yesterday, it mentioned dildos and pegging. Now, obviously they should include that topic, but do you really have to greet the wide variety of people with that, on the very front page? Why not make g**tse a featured pic? To eliminate it would be culturally POV.
Plus, every article reeks with socialist bias and the editors take every chance to slip in socialist terminology like "reserve army of the unemployed" or "proletariat" or "wage slavery" like they're neutral terms. (Yes, I correct that were I find it.) And then they have the new "energy development" Wikipedia project, that promotes socialist misinformation by ignoring futures markets and speculation, the fundamental methods by which resource fluctuations and overuse are stamped out. You were aware that your donation to Wikipedia was used to promote socialist misinformation, right?
Seriously, it's funny to watch all these people try to find a practical application for this invention that cannot already be done better and cheaper with pre-existing technology, in order to justify the research expense (probably paid by you and me out of our wages). And that's before you even divide the research cost by the success rate!
What will they think of next?
I didn't say it was a fundamental theorem; math doesn't talk about taxes. It does, however, have a lot to say about which functions have maxima, and the tax revenue/tax rate curve is one of them (positive on [0,100], zero at 0 and 100, no vertical asymptotes). Don't try to bluff your way out of this. I said the function was positive. You took that to mean strictly increasing (positive slope). You were wrong. Sorry, no two ways about it. If you stick your neck out that far on a mistake that big, I'd really hate to know what your "research" looks like, unless that's "research" for a good employer at the day labor site.
I agreed from the outset, and in the post you didn't read before firing off your mouth, that there can be multiple Laffer points (though I deem it unlikely). Also (~8th time): I never claimed the Laffer curve guarantees that cutting taxes can increase revenues, just that it's a possibility. It is useful for policy making, because ~95% of politicians don't understand, or act as if they don't understand, its fundamental insight: taxes can kill the goose that lays golden eggs. Taxes can hurt the economy, even without benefiting the government. People won't admit this very plain insight because they don't like the implications: that the politicians they have been supporting have been hurting more than helping.
That's why they hem and haw about it, but when presented with its unassailable logic, they revert to "Well it's still a stupid curve... because we might not be past a Laffer point... uh, and the curve is wrong too." Well, sorry, it's not. And if people stopped claiming it's not, we could actually start finding out where we are.
Did you not understand the significance of what just happened? Sure, you have to have a working system to receive a patent ... now. But, just as the patent office just eliminated the "technological arts" requirement, they could eliminate the "working system" requirement. That was my point.
Come on, they had to do this at some point. All intellectual works are basically discovery of some *previously existing* but useful aspect of reality. If you invent a new mousetrap, you're discovering the previously-existing aspect of reality that some organization of different materials is better at catching mice. If you write a book, you're discovering the previously-existing aspect of reality that people like a certain combination of words. Trying to classify one kind as "technological" and the other as not gets really tricky.
Next on the list: the patent office stops rejecting discoveries as being "too theoretical". Imagine working around those patents!
Thanks for reading this post of mine:
o ld=1&commentsort=0&tid=228&mode=thread&pid=1380916 4#13809477
http://slashdot.org/comments.pl?sid=165444&thresh
before firing off on subjects you don't really understand.
I said a positive function, not a positive slope function. Try reading my posts. Or the construction job ads.
Really? You played the riddle? Oh? You mean you couldn't play the puzzle? Let's try not to be a Firefox apologist. Just because you can *get to* the site doesn't mean you get all its functionality. It specifically says to do the puzzle you need IE. Sorry, nice try though.
Careful with that argument. It seems to have as an implicit assumption that monarchs know what's best. Absolute monarchy - is that the kind of government you favour?
Check out Democracy: The God that Failed (Transaction, 2002) by Hans-Hermann Hoppe (on amazon and wikipedia), who argues that while democracy and monarchy are morally bankrupt forms of government, monarchy is clearly preferable for essentially the reasons I gave: the monarch owns the capital value of the country, while a democratic leader is just a caretaker and only owns temporary usage rights. A monarch will maximize capital value, which means taking into account long-term effects of his actions, while a democratic leader will maximize his current takings at the expense of the future - get while the gettin's good (think in terms of the Senator Bilkins Highway to Nowhere). This is not to say all monarchs are foresighted, and all presidents are short-sighted, just that the former's incentive structure encourages long-term thinking, while the latter's discourages it. Again, it's a ceteris paribus statement: the same person will be more reckless with a country if it does not cost him the capital value than if it does cost him the capital value.
Nor does it assume monarch's know what's best, merely that they have more incentive to search, and because there were more of them (over 1000 in the Holy Roman Empire) they have more data to go on. A monarch might have heard from 20 other princes that they raised taxes to 20% and saw a loss in revenue, whie 6 raised taxes to 20% and saw a gain. He could then adapt appropriately. Likewise, another could talk with other monarchs who made massive internal improvements and find out if that increased the number of people wanting to live there and thus the taxes they could get away with charging and then see if that offset the cost of making that improvement. Further, unlike the average voter, a monarch feels the full impact of his policies and doesn't face the "what does your vote matter?" problem, so he is more likely to research what actually works.
Again, these effects could all be minor relative to other effect, but they nowhere rely on monarchs as monarchs knowing what's best.
This should really say "...but make no mistake there is at least one Laffer point."
Hm...good point. To clarify that issue, my statement probably should have read:
"Again, you might not be past a Laffer point, but make no mistake there is a Laffer point."
Oops, it already did.
Note I referred to being past "a" Laffer point, not "the" Laffer point, so obviously I didn't assume there was only one.
You can't really assume it's a smooth function,
Not necessary. So there exist tax rates above which revenues jump up, or tax rates above which the revenues jump down. Doesn't change the fundamental insight.
let alone with a single point that is optimal.
Never said so or even hinted. See above.
Hell, you can't even assume the curve doesn't change over time.
Of course it will change over time; the theory never says otherwise, and neither did I. It's phrased under a ceteris paribus clause. The claim is that it's possible that at some specific point in time, with all its policies, if you just lower taxes, you will have higher revenues that if you had those policies but not altered clauses. The circumstances can of course change.
And you know whether the king's using the best or worse case, or something in between...how?
I had a conversation with Brian0918 on AIM this morning, in which he revealed he's really trolling when I pointed out to him there is no solution (see my other posts) on this topic. Here's a little tidbit: ". i usually just post the problem to get people into big disputes, which so far has worked 2 out of 2 times". If you want the full conversation, email me at sbartaNOSPAM_at_MAPSONgmail.com.
Sure it is. Monarchs tried to maximize revenues. If building a new bridge meant he could get more in taxes, accounting for the interest rate, he would do it. If some monarchs systematically guessed wrong on the utility of bridges, the ones that didn't would beat them out (war, immigration). The evidence I gave is actually more conclusive: that monarchs did not systematically engage in social spending and internal improvements probably means they don't increase tax revenues, which mean they probably don't increase the health of the economy, else they would lead to more tax revenues.